State warns against online tax scams

SALT LAKE CITY — With the April filing deadline not so far away, the Utah Tax Commission is cautioning taxpayers to beware of scams — particularly those perpetrated online.

In the wake of increasing fraud activity during the 2015 tax season, officials are advising extra care and more stringent security to protect against identity theft and financial fraud.

Last year, the Utah State Tax Commission identified several attempts by scammers to file fraudulent income tax returns for the 2014 filing season. The fraudulent filings apparently originated from data compromised through “a third-party commercial tax preparation software process,” according to the commission.

“It’s really important with today’s electronics for people filing from their home computer to have a strong password,” said spokeswoman Dolores Furniss. “(Criminals often) have stolen the victim’s identity somewhere else and then took a guess at what their password might be and it worked.”

She said thousands of taxpayers had their accounts hacked resulting in enormous losses totaling millions of dollars. Fortunately, the state was able to prevent more than $11 million in refund theft last year, she added.

Nationally, the Internal Revenue Service was struck by $5.8 billion in erroneous refunds for tax year 2013 and over $21 billion in tax year 2014, Furniss said. Most of the illicit activity is coming from hackers abroad, she said.

“We have a lot of foreign countries out there that we see returns come from that are not legitimate,” Furniss said. “We can’t stress enough about protecting your data.”

For those taxpayers who use a professional preparer, be sure the provider is reputable. Make sure they are an “enrolled agent” with the IRS, or if they are a certified public accountant, verify their license with the state.

If you feel something is amiss with the conduct of the preparer, contact the state Tax Commission immediately, she warned.